<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published March 2, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>PSC places bet on lottery business as it diversifies
By ARTHUR SIM
IN PHNOM PENH
PSC Corporation, perhaps best known for iEcon minimarts and the Channel 8 variety show PSC Night, has been diversifying its business quietly over the last few years. Over the weekend it launched its latest venture - a sports lottery in Cambodia.
PSC CEO and managing director Foo Der Rong said: 'We don't want to be positioned as a provisions company.'
PSC, which owns proprietary brands like Royal Umbrella rice, announced last Friday that turnover in its consumer business rose just 3.9 per cent from 2008 to $211.85 million last year. But turnover for its packaging business jumped 17.7 per cent in the same period to $113.36 million.
PSC's health solutions business, which consists of owning a 160-bed hospital in Australia and building fully equipped and staffed hospitals in Malaysia, saw turnover double to $6.02 million.
Net profit, including minority interests, for FY09 was up 280 per cent to $20.3 million, attributed mainly to new businesses.
Total revenue was up 9.2 per cent to $331.2 million for the year.
'Strategic investments we made a few years ago are now starting to contribute to our bottomline,' said Mr Foo.
While PSC's consumer business is 'recession proof', he said gross profit margins in its new businesses are better. For food, gross profit margins, excluding certain key products, range between 10 and 15 per cent and may be as low as 6 per cent for wholesale products.
In FY09, gross profit margin increased to 26.3 per cent from 24.3 per cent in the previous year, thanks to PSC's health and packaging businesses.
'It's also not easy to grow regionally in the food business,' he said.
Still, PSC's latest venture may raise some eyebrows. In January, PSC announced that it would acquire a 25 per cent stake in Sport Social Affairs Co (SSA), a Cambodian company which has a 30-year exclusive agreement with the National Sport Foundation of the National Olympic Council of Cambodia for US$4.5 million. SSA has also been issued a licence by the Ministry of Finance of Cambodia to operate a sports lottery business.
The lottery business could not be further removed from PSC's other businesses, but that apparently is the point.
Speaking at the official opening of the SSA office in Phnom Penh, Mr Foo said: 'We gain knowledge (of new businesses) when we invest in them.' He added that PSC is expected to contribute its management expertise to SSA.
PSC is not averse to disposing of businesses it no longer sees itself as being aligned with. Last week, it announced it would dispose of its 51 per cent stake in Innoform Media, which it acquired in 2004 for $2.8 million. PSC will now sell it for about $6.6 million.
It will pay a final dividend of 1.5 cents per share for the year, to be paid on May 19. Earnings per share for the year was 2.84 cents, up from 0.62 cents in the previous year.
PSC shares closed one cent higher at 26.5 cents yesterday.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>PSC places bet on lottery business as it diversifies
By ARTHUR SIM
IN PHNOM PENH
PSC Corporation, perhaps best known for iEcon minimarts and the Channel 8 variety show PSC Night, has been diversifying its business quietly over the last few years. Over the weekend it launched its latest venture - a sports lottery in Cambodia.
PSC CEO and managing director Foo Der Rong said: 'We don't want to be positioned as a provisions company.'
PSC, which owns proprietary brands like Royal Umbrella rice, announced last Friday that turnover in its consumer business rose just 3.9 per cent from 2008 to $211.85 million last year. But turnover for its packaging business jumped 17.7 per cent in the same period to $113.36 million.
PSC's health solutions business, which consists of owning a 160-bed hospital in Australia and building fully equipped and staffed hospitals in Malaysia, saw turnover double to $6.02 million.
Net profit, including minority interests, for FY09 was up 280 per cent to $20.3 million, attributed mainly to new businesses.
Total revenue was up 9.2 per cent to $331.2 million for the year.
'Strategic investments we made a few years ago are now starting to contribute to our bottomline,' said Mr Foo.
While PSC's consumer business is 'recession proof', he said gross profit margins in its new businesses are better. For food, gross profit margins, excluding certain key products, range between 10 and 15 per cent and may be as low as 6 per cent for wholesale products.
In FY09, gross profit margin increased to 26.3 per cent from 24.3 per cent in the previous year, thanks to PSC's health and packaging businesses.
'It's also not easy to grow regionally in the food business,' he said.
Still, PSC's latest venture may raise some eyebrows. In January, PSC announced that it would acquire a 25 per cent stake in Sport Social Affairs Co (SSA), a Cambodian company which has a 30-year exclusive agreement with the National Sport Foundation of the National Olympic Council of Cambodia for US$4.5 million. SSA has also been issued a licence by the Ministry of Finance of Cambodia to operate a sports lottery business.
The lottery business could not be further removed from PSC's other businesses, but that apparently is the point.
Speaking at the official opening of the SSA office in Phnom Penh, Mr Foo said: 'We gain knowledge (of new businesses) when we invest in them.' He added that PSC is expected to contribute its management expertise to SSA.
PSC is not averse to disposing of businesses it no longer sees itself as being aligned with. Last week, it announced it would dispose of its 51 per cent stake in Innoform Media, which it acquired in 2004 for $2.8 million. PSC will now sell it for about $6.6 million.
It will pay a final dividend of 1.5 cents per share for the year, to be paid on May 19. Earnings per share for the year was 2.84 cents, up from 0.62 cents in the previous year.
PSC shares closed one cent higher at 26.5 cents yesterday.
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